Market Brief
The slightly weaker US economic data, as well as worries about the stability of the US financial industry, prompted selling in risk correlated trades last week. In the FX market, high beta currencies were the biggest losers as falling equity and commodity prices renewed risk-aversion & spawned correction fears. Friday U.S. stocks tumbled the most since July after declines in personal spending and consumer confidence and the threat of a CIT bankruptcy raised concern over the durability of the economic recovery. The S&P 500 Index dropped 2.5% to 1,039.04 The Dow Jones Index dropped 230.65 points, or 2.3 percent, to 9,731.93 as the consumer confidence data signaled job losses may continue to restrain household spending. Citigroup tumbled on a report predicting a $10 billion write-down for Q4. American Express Co. and Walt Disney Co. slid after drop in purchases and the University of Michigan sentiment index weakened. The consumer sentiment decreased to 70.6 from 73.5 in September, which was the highest in more than a year. Markets are still very nervous and have been cautious about building long risk position however we expect the sentiment to improve as the week’s progresses. However, soon after the announcement of the CIT pre-packaged bankruptcy, risk correlated trades were able to rally back and have been gaining (helped along by postive European equities). Today starts a week, crammed with economic data and central bank meetings, with a string of manufacturing surveys. In Asia, the China PMIs printed higher then expected. The figure was an 18month high and continues to signal strong expansion in the manufacturing sector. In the US session October's ISM manufacturing index is expected to more than reverse the surprise fall in September. With US economic data providing a source of FX volatility recently the stronger figures should help firm up risk appetite.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9802.95 | -2.3 |
| Hang Seng Index | 21541.26 | -0.97 |
| Shanghai Index | 3076.65 | 2.69 |
| FTSE futures | 5001 | -2.2 |
| DAX futures | 5425 | 0.42 |
| SMI Futures | 6279 | -0.01 |
| S&P future | 1039.3 | 0.6 |
| World Markets | Current Level | % Change |
| Gold | 1045.84 | 0.04 |
| Silver | 16.41 | 0.58 |
| VIX | 30.69 | 23.94 |
| Crude wti | 77.17 | 0.22 |
| USD Index | 76.26 | -0.04 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Manufacturing PMI, index Oct | -- | 55.9 | SEK / 07.30 |
| Manufacturing PMI, index Oct | 54.9 | 54.3 | CHF / 08.30 |
| Germany: Final Manufacturing PMI, index Oct | 51.1 | 51.1 P | EUR / 08.53 |
| Final Manufacturing PMI, index Oct | 50.7 | 50.7 | EUR / 0.8.58 |
| Manufacturing PMI, index Oct | 50 | 49.5 | GBP / 09.28 |
| ISM manufacturing, index Oct | 53 | 52.6 | USD / 15.00 |
| Pending home sales, %m/m (y/y) Sep | 0.4 (14.6) | 6.4 (12.3) | USD / 15.00 |
| Construction spending, %m/m (y/y) Sep | -0.3,-13.1 | 0.8,-11.6 | USD / 15.00 |
| SNB board member Jordan speaks | -- | -- | CHF / 16.30 |
| Fed Governor Tarullo (FOMC voter) speaks on execut | -- | -- | USD / 19.15 |
Currency Tech
AUDUSD
R 2: 0.9330
R 1: 0.9220
CURRENT: 0.9047
S 1: 0.8865
S 2: 0.8760
USDCAD
R 2: 1.0990
R 1: 1.0959
CURRENT: 1.0799
S 1: 1.0627
S 2: 1.0505
EURJPY
R 2: 135.97
R 1: 134.75
CURRENT: 132.96
S 1: 132.30
S 2: 132.25
USDMXN
R 2: 13.454
R 1: 13.365
CURRENT: 13.2477
S 1: 13.15
S 2: 12.986
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
